BBB Complaint w/ Midland's "Factoring" Antics

I think I want to move forward with the complaint about Midland reporting as a Factoring Company, and also reporting increasing balances each month. I did a DV, which they responded to with the final statement from the OC. Of course that balance was only half as much as Midland's trying to gouge me for now... I sent a request to remove the info to all 3 CRA's, with no luck. OC has SOLD the charged off debts, and is reporting $0, on EQ & EX (not reporting at all on TU). If I understand correctly Midland CANNOT report as a factoring company, and continue to increase balances, right?

I've scoured the threads for an example of how to write my BBB complaint. I'm just not clear on exactly what it should say. Does anyone have any threads bookmarked, or can someone give me a little bit of guidance? Do I send to my local BBB, or the BBB in Midland's home state? Do I request that they remove the TL, or simply force Midland to report correctly--as a charge off, and for the correct balance?

Re: BBB Complaint w/ Midland's "Factoring" Antics

Factoring is a totally legal and acceptable business practice, wherein a party purchases delinquent debt from creditor, enabling the creditor to turn a receivalble asset into instant cash, albiet at less than its full potential value.

Why can they not report their business as what it is?

Having become owner of the debt, they are entitled to legitimate fees.

The issue is what is legitimate, not that they cannot add any additional amounts.

It is well-established case law that a party who purchases a delinquent debt is a "debt collector" and thus subject to the requirements of the FDCPA.

Section 808(1) of the FDCPA addresses the specific issue of what a debt collector is or is not permitted to collect.

In a nutshell, it specifies that they may not attempt to collect any amount, including any fees, interest, etc., unless such amounts were either specfically authorized in the consumer's original account agreement with creditor, or are otherwise specfically authorized by law.

I thus see the issue as one of whether whatever they are attempting to collect is authorized under the strict limitations of FDCPA 808(1), and not some descriptor such as a "factoring company."

Re: BBB Complaint w/ Midland's "Factoring" Antics

Factoring is a totally legal and acceptable business practice, wherein a party purchases delinquent debt from creditor, enabling the creditor to turn a receivalble asset into instant cash, albiet at less than its full potential value.

This part I totally agree with, the rest of it not so much. Here is the deal, they are putting in a specific code in that the CRAs don't have an exact match for, hence it is putting it in as a factoring company. I've hear the "Well we put in 0C in this box and that's what the CRA puts it down for. It's not our fault. So if I walk into a bank wearing a ski mask and a trench coat and hand the teller a note that says give me money, I'm not robbing the bank, that's just what she took it as.

This is a blatant attempt to skirt the rules governing CAs. They put themselves into the OC category and post as if they were the OC. The problem is it's just really not worth the lawyers time and effort. However with the new oversight maybe there will be a change. Or if there is a major law suit or Class Action Suit that sets precedent this will change.

I could just imagine the conference these guys were at and learned about this loophole. Don't get me wrong, we use exploits, so I guess they use exploits too. But it's wrong. Just my two cents.

Re: BBB Complaint w/ Midland's "Factoring" Antics

Can you cite some of the case law that says a buyer of delinquent debt is a "Debt collector"? I would like to be able to cite some of the cases for CACH LLC not being licensed as a "debt collector" in my state, because they claim they are a 3rd party debt buyer, and NOT a debt collector.

Re: BBB Complaint w/ Midland's "Factoring" Antics

I'm not a lawyer, just have done some digging on my own. A Factoring Agency buys debts that are in good standing to create a positive cash flow for the original creditor. In my case they bought a 5 year old CO and re-aged it and put themselves as the CO. When I contacted them on it, they said they can list as the OC and the DOFD of the original creditor was not their responsibility since they were now the owner of the debt.

Re: BBB Complaint w/ Midland's "Factoring" Antics

Hmmm... everything I've seen (and, admittedly, I'm not referring to primary source verification) says true factoring companies purchase current accounts receivable, not written offf debts. I honestly thought that was where the distinction was made between factoring company and debt collector and/or collection agency. I've also seen Midland's responses to BBB complaints, where they say 2 of the 3 CRA's "advised" them to report as factoring companies... a la, the loophole mentioned prior. Yes, it was my credit card that I overextended myself for/on. Yes, I fully accept responsibility and am happy to fairly settle the matter. I just don't think it's right that they can continue to tack on fees, report incorrectly, re-age, misrepresent the debt, etc... when they likely purchased the debt for less than $100 total. If they want to report i & hold it over my head for the next 5 years, fine, but report it correctly! It's a CO, DOFD 8/11. It will also be listed as paid, when they remove their bogus "interest & fees." I did draft a letter, and I figure it can't hurt to send it to the BBB. I'm not holding my breath for anything.

Re: BBB Complaint w/ Midland's "Factoring" Antics

I still have one I'm dealing with. They are just a thorn in my side. When I first started cleaning up my reports, I paid everyone. I don't care what it said, I sent a check. I was uneducated, in essence, I hadn't been to myFICO yet.

I paid the OC on this one and the CA. I don't care about that either, it wasn't much. I don't even mind them reporting, I just want them to report correctly, but alas they won't. So I've been busy trying to get them to report correctly. Disputing with them, making them correspond back to me, file with the BBB, next is State AG office and then FTC. Then I'm going to write my state senator and congressman. I'd write the dogcatcher if I thought they'd have to correspond back to them. By the time I'm through they will have spent more on paperwork, postage and manhours than they collected from me. Would have been a lot easier and cheaper if they'd just comply.

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